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U.S. Companies To Spend More Than $19 Billion On Third-Party Audience Data

The Interactive Advertising Bureau (IAB) and the Data Center of Excellence released a forecast Wednesday that puts the amount marketers will spend on audience data, and solutions to
manage it, at about $19.2 billion in 2018.

“Programmatic advertising has taken a central role in the marketing landscape and this study shows how increasingly vital third-party data has
become as a result,” stated Orchid Richardson, vice president and managing director at the IAB Data Center of Excellence. “Third-party data provides insights — from geolocation to
interests and more — that can help brands deliver highly personalized messages to consumers and expand audience.”

The IAB pointed to programmatic advertising and identity management as part of the
catalyst for the 17.5% increase from the prior year. Companies are spending more money because it's easier to identify high-performing data, the report said.

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Winterberry Group complied
the research. The forecast is based on primary research and analysis of financial information published by U.S. commercial data providers.

The IAB also released numbers that break down overall
spending and the growth. Digital is forecast to contribute $3.67 billion — up 36.9% — while terrestrial/PII will contribute $3.62 billion, up 2.5%. Transactional should contribute
$2.80 billion, up 3.5%. Specialty and engagement should contribute $1.02 billion, up 50.9%, and Identity about $0.85 billion, up 50.3%.

Platforms and technology that offer data activation help
to determine accuracy and the ability to take action on audience data, while providing contextual brand safety. The report analyzed these in two categories.

One might ask how valuable the "third party" data in question is and whether it's really worth the price. In traditional media the costs of audience surveys which also provide demographics, mindset and product usage information is a tiny fraction of the total ad spend. I wonder if there are more specific breakdowns of the various types of "third party" data, what the data is used for and who pays for it?

Totally agree with Ed, there should be specific breakdowns of the diverse range in 3rd party "data"...also how its sourced...its like everyone in this area is getting on the data bandwagon though not sourcing what's "under the hood" with billions of dollars at stake, in garnering accrate metrics in a environment that's digitally generates about 40% of audience metrics as U.S. ad fraud/bots.

It's odd that this article didn't mention two related things that overshadow "Third Party Data". First, the recent "Vectaury" ruling from the French privacy regulator CNIL that explicitly says consent for data processing cannot be contractually conveyed to third parties - consent is only valid when its "first party". This ruling effectively makes all data collected since May 25, 2018 that has been shared with third parties illegal, (or requiring "repermissioning" at a minimum). The second omission is the new California Consumer Privacy Act (CCPA) which is in force today and will be enforced starting January 1, 2020. This GDPR-like law explicitly requires a button on websites and apps saying "Do Not Sell My Data" that users can click to prevent their data from being sold to third parties. Like the previous commenter, we believe "Third Party" data will rapidly become obsolete in the next 18 months because of these and other privacy regulations.